People go through transitions as they consider their knowledge, skills and experience in trading. Some of the branch points are significant. You are looking at daily market action and see that the daily extremes could be used as a measure of performance relative to the daily potential. You are considering one traverse of the price range. Many have gone before you. For what ever reasons, I consider a day to be generally acombination of four traverses where two pairs are bridged in the middle of the day by a period of relative inactivity. This means that I deal with your consideration more often, daily, than you are presently doing. The "W" or "M" formation I consider has 5 extremes a day. Because these are "available"I spent a lot of time considering the manifold ways to "detect" them. Among the many routes to get to this kind of thinking,there is a subset that gives consideration to the fact that you have to be in the market to make money. The subset views your first paragraph list as "edges" and your second view, the traverse as a similar element as those in your fist paragraph. When you have become accomplished at doing the traverse, you will have two significant tasks understood: holding through the trending from one extreme to the other and being able to judge and play the two reversals at the ends. These two clues, holding and reersing, are the key ingredients to master for making the money that represents the continuing potential of the market to deliver money to you daily. As you can see your respondents have suggested to you the whole gamut of possibilities. Poor Steven says to skip it, others are still in the realm of edging about the market. The combination of knowledge and skills that you seek turn out to be a synthesis of many parts. How to assimilate these components is what is missing in the commentary, thus far, provided to you. It only comes from orienting to the market from a holistic point of view. Most of the comments you are receiving are founded in non-holistic orientations of which there are many. Traversing from one extreme to another can occur simply or it can be in a series of related steps. It is not difficult to discern which is which, it turns out. It is based upon a strength measure. In my experience, what you have brought up is one of the most significant steps in multiplying your daily return potential because of the level of thinking you attain by the time you accomplish what you want to be able to do. The reason being, that as you get it all together, you emerge as a very astute trader. For me to communicate the trading technique to those I have mentored, required me to come up with a comprehensive graphic of how to follow the sequences of events that allow a person to begin the move, to complete the move and to recognize that the end of the movement has occurred. You can best originate a workable solution for yourself and your thinking style through a simple and thorough data collection and analysis. The necessity of having a good approach for each (data collection and analysis) is the stumbling block that ordinarily stumps most traders in transition. As you can see in ET there are almost no experts and few intermediates. Most ET'ers are advanced beginners. After you have done both, data collection and analysis, the key is to come up with a set of analysis results that have the highest utility for decision making. This lack of utility is the stumbling block for most people who try to progress in trading. Since they do not have it in mind as they work to uild knowledge and skills, they are unable to do anything very productive. If you choose you can always classify the imput you get from others by their stated or implied point in this process of self improvement. Anyone who is not speaking from the viewpoint of having a cogent streamlined set of analysis descriptors expressly classified for decision making, is never going to get past advanced beginner, nor are they going to be able to advise anyone else. To do what you want, you have to have a strident comprehensive analysis results set (descriptors) that allows you to make the correct decisions for beginning, continuing, and ending the traverse, whether it be simple or complex. Obviously, this becomes the basis for reducing the opportunity to software for mechanical trading. If you spend enough time in this orientation, you can get together an approach. It takes about a week to transfer the result, successfully, to another person. Generating the template is the most powerful mind building exercise I know of. It is a good way to get to an intermediate level faster.
Catching the exact high and low in impossible on a consistant basis. I just like to know which stocks are making more highs and more lows that way I can focus better.
One basic condition for success is to set achievable goals. In my opinion you can't pin point the H/L of the day with any meaningful consistence. So it's better to look for trades that have lower risk and higher odds of profit, i.e. try to catch some portion of the the larger swings.
Many traders look for a brainless method of trading. This is one of the main reasons for their failed quest. No guru can transfer successfully, even his best and most foolproof method, to such people.
Grob- I apprecaite the insightfulness with which you have kindly responded. I have been in the process of considering much of what you have discussed for a good deal of time. I was looking to understand if there are others who seek the same manifestation of price extremes on a daily basis by virtue of price action recognition. That said, you make reference to the "traverse." I'm hoping that you may be so kind as to clarify what exactly it is that you mean by this term. Best, Golablue
This is true but unfortunately it will take very long time until new trader can understand this concept. This concept cannot be understood before having experiences and failures.
Actually, this is not as difficult as it seems. Just get a subscription to tomorrow's WSJ. Then, first thing in the morning, use the Hi/Lo prices for today (as shown in tomorrow's WSJ) to put in your limit buy and sell orders. Now, the difficult part of this strategy is finding the Genie that will grant you that subscription to tomorrow's WSJ. But seriously, what would help most traders is to avoid buying the high of the day and selling the low of the day which seems to happen far more often!
Does the WSJ have a limited number of subscribers or unlimited? Then I might have a chance. golablue, now you see the proof. I like this one.